All eyes will be on streaming subscribers, profitability and how the success of the "Deadpool & Wolverine" movie translated into The Walt Disney Company's
Earnings Estimates: Analysts expect the media conglomerate to report fourth-quarter revenue of $22.35 billion on Thursday before the market open. That's up from $21.24 billion in last year's fourth quarter, according to data from Benzinga Pro.
Disney beat analyst estimates for revenue in the last quarter, but has missed estimates in four of the last five quarters and five of the last 10 quarters overall.
Analysts expect the company to report fourth-quarter earnings per share of $1.10, up from 82 cents per share in last year's fourth quarter. The company has beaten analyst estimates for earnings per share in five straight quarters.
In the last 10 quarters, Disney has beaten analyst estimates eight times, met estimates once and missed estimates only once.
What Analysts Say: Strong streaming subscriber growth and box office strength are two areas Goldman Sachs analyst Michael Ng is watching for when Disney reports Thursday.
Ng, who has a buy rating on Disney lowered the price target from $124 to $120 in September before raising the price target back up to $125 later in October.
In September, Ng said the streaming and movie strength could offset weakness in Experiences and linear.
"The subscriber momentum and recent price increases should put Direct-to-Consumer on track for continued revenue and profit growth," Ng said.
The analyst highlighted Disney+ bundles, promotional offers and the streaming premiere of "Inside Out 2" on the platform on Sept. 25 as catalysts that could increase subscribers. "Inside Out 2," the highest grossing animated film of all time, will help the box office segment, the analyst added.
Ng forecasts Disney adding 3.5 million net core Disney+ subscribers in the quarter compared to consensus estimates of 1.8 million.
In October, Ng's investor note highlighted the future revenue potential of Disney's Lightning Lane Premiere Pass at theme parks. The analyst said the pass could add $220 million to $230 million in annual revenue beginning in 2025.
Disney's streaming segment was one of the key highlights from Needham analyst Laura Martin in a September note on Disney.
The analyst reiterated a Buy rating and $110 price target at the time.
Martin said Disney's direct-to-consumer segment could breakeven in fiscal 2024 and have "double-digit" margins at maturity.
The analyst also said Disney could see 5.5 million to 6 million new subscribers from a partnership with Charter Communications beginning in the second half of fiscal 2024.
Key Items to Watch: Disney's fourth-quarter financial results will likely see its streaming and movie segments as the most watched by analysts and investors.
Disney reported 118.3 million Disney+ core subscribers in the third quarter.
The company's combined streaming businesses of Disney+, Hulu and ESPN+ posted its first quarterly profit in the third quarter, which came ahead of expectations. The company expects both its Entertainment DTC and ESPN+ segments to be profitable in the fourth quarter, which comes as the Entertainment DTC was still slightly negative in the third quarter.
"Deadpool & Wolverine" is the second-highest-grossing film domestically in 2024 with $636.7 million at the box office. Since July, the film has grossed $1.34 billion worldwide and could help power Disney's film segment in the fourth fiscal quarter.
"Inside Out 2″ will also likely factor into fourth-quarter results. The film premiered in June and grossed $183.5 million of its $653 million domestic total in the quarter. For the quarter, Disney had two of the top five grossing domestic films.
"Alien: Romulus" could also factor into the results. The August release grossed $105.3 million domestically and $350.9 million worldwide.
Disney's earnings report comes days after "Deadpool & Wolverine" premiered on Disney+ (Nov. 12) and investors could get an early readout on whether the release was widely watched and boosted subscribers for the future quarter.
Other items investors and analysts will likely be watching include the health of the theme park division, an update on the CEO succession search and an update on the company's investment in Epic Games and future games being developed.
Price Action: Disney stock is up 1% to $102.26 on Thursday versus a 52-week trading range of $83.91 to $123.74. Disney stock is up 12.7% year-to-date in 2024.
